Democrats won back the House of Representatives in Tuesday's midterm elections, wresting control from Republicans in an outcome that will shape the next two years of Donald Trump's presidency.
In congressional campaigns across the country, healthcare emerged as a key issue, with pre-existing conditions and rising prescription drug costs among the most prominently highlighted.
Results, though, support multiple interpretations of how that message was received by voters. In Missouri, the incumbent Democratic Senator, Claire McCaskill, ran as a major critic of the pharma industry and lost. But in New Jersey, former Celgene executive Bob Hugin failed to unseat Democratic Senator Bob Menendez.
Still, there are several outcomes that look clear for drugmakers. Here are five:
More scrutiny on drug pricing ...
The Trump administration has taken more concrete steps in 2018 to address rising drug prices, advancing two significant proposals on the issue since unveiling a policy blueprint in May.
With Democrats set to take control of the House, cooperation between the White House and the party more traditionally seen as a foe to pharma would be a major threat to industry.
"I think that we could find common ground in reducing the cost of prescription drugs, if the president is serious about his saying that he wants to do that," House Minority Leader Nancy Pelosi, D-Calif., said in a TV interview Tuesday. "He has pulled his punch on it so far."
Lowering the cost of prescription drugs is one of 12 key issues in the "Better Deal" platform unveiled by Democrats earlier this year. One idea, allowing Medicare Part D to negotiate with manufacturers on prices, is likely to get more attention with Democrats in charge of the House — even if the prospects of passing legislation of that magnitude remains small.
At a minimum, a Democratic majority in the House is likely to raise the political temperature on drug pricing.
"It's their turn to have a chance to be back on the control: You control the committees. You can now subpoena documents and information," said Benjamin Isgur, PwC's Health Research Institute leader, in an interview with BioPharma Dive. "You can compel agency heads, agency staff to come before your committee and ask a lot of questions."
Committee hearings held in the wake of scandals at Valeant Pharmaceuticals and Turing Pharmaceuticals gave the pharma industry a black eye and stirred widespread criticism.
With Democrats holding the gavel on key committees, that drumbeat of political pressure could return. (Although McCaskill's defeat removes one fierce critic.)
But not necessarily major disruption
While Trump working across the aisle with Democrats to rein in drugmakers' pricing power is a nightmare scenario for industry, analysts don't expect a disruptive partnership to emerge.
"We don't think a deal is likely on anything significant for a number of reasons, the most important being that divided government likely returns both parties to their traditional stances on drug pricing," wrote Rick Weissenstein of Cowen's Washington Research group in a Nov. 6 note.
Weissenstein pointed to the House Energy and Commerce Committee in particular, where industry supportive Reps. Frank Pallone, D-NJ, and Anna Eshoo, D-CA, are likely to hold positions of power.
Pharma companies have contributed nearly $1.5 million in campaign funds to Pallone and Eshoo combined since 2007, according to numbers compiled by Kaiser Health News.
Height Securities analyst Andrea Harris summed up the outlook for drugmakers even more succinctly.
"Headline risk ahead, but Republican Senate and pharma-friendly Democrats will prevent disruptive policy change," she wrote in a Nov. 7 note.
And for all the attention given to the administration's recent proposals to change how Medicare Part B pays for drugs and to require price disclosure in TV ads, the pharma industry's fundamental business model remains intact.
Strong intellectual property protection and regulatory exclusivity for branded drugs ensures extended windows of pricing power for manufacturers. Public criticism from the president has stayed a handful of drugmakers from taking further price increases in 2018, but recent comments from Pfizer and J&J suggest business might return to normal next year.
Continued action in the states
States, though, could be the source of more headaches for drugmakers.
Democrats picked up governorships in 7 states, including Nevada, Wisconsin, and Illinois, that were previously held by Republicans. With that power comes greater potential for drug pricing legislation to move forward into law.
"Democratic-led states ... are more likely to consider and pass laws requiring greater transparency from drug manufacturers around product price increases," according to a report released by the PwC Health Research Institute Wednesday.
In the past two years, legislatures in states like Vermont, California, Nevada and Maryland passed bills requiring more transparency from drugmakers around drug pricing.
California, for instance, passed a law last year that requires manufacturers to notify drug purchasers at least 90 days before a planned price increase. Drug companies also have to disclose information justifying the price hike.
So far this year, the National Academy for State Health Policy has tracked 27 state bills aimed at pricing transparency, as well as 12 aimed at price gouging.
Medicaid expansions to add to insured population
Voters in three states — Idaho, Nebraska and Utah — approved ballot initiatives to expand Medicaid, potentially increasing the pool of insured patients by 330,000 people overall.
Newly elected Democratic governors in Kansas, Maine and Wisconsin further raise the prospect for expansion of the government health program.
For pharma companies, a wider pool of insured patients can boost the addressable market for their drugs, even if the market opportunity there is more limited than in commercial settings.
Business as usual at the FDA
One agency unlikely to see much change from the midterm elections? The Food and Drug Administration.
Under Scott Gottlieb, the FDA has won high marks from Democrats and Republicans alike, despite initial concerns from some on the left that Gottlieb might weaken the standards for drug approvals.
The agency, though, seems to have walked that line fairly well, and has pulled every lever it can to help boost generic competition and positively impact drug prices.
"The track that the FDA is on right now has a lot of bipartisan support," said PwC's Isgur.
Correction: A previous version of this article incorrectly stated the amount of pharma campaign contributions to Reps. Frank Pallone and Anna Eshoo. BioPharma Dive regrets the error.